Intercity Passenger Rail: Amtrak Will Continue to Have Difficulty Controlling Its Costs and Meeting Capital Needs
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Intercity Passenger Rail: Amtrak Will Continue to Have Difficulty Controlling Its Costs and Meeting Capital Needs

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  • Alternative Title:
    Amtrak's costs and capital needs
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  • Abstract:
    This report responds to the request to review Amtrak's costs and capital investment needs. In particular, this report discusses changes since 1995 in Amtrak's operating costs, including labor costs, payments to freight railroads to access their track and keep Amtrak trains on time, and interest on commercial debt; the projected changes over the next 5 years; and Amtrak's plans to address these costs; (2) Amtrak's short- and long-term capital investment requirements, including investments to address "state of good repair" issues and investments in its progressive overhaul program and Northeast Corridor high-speed rail program; and (3) the availability of federal and nonfederal funds for Amtrak's capital investments. Unless otherwise noted, all dollar amounts in this report are in constant 1999 dollars. Results in Brief Amtrak's operating costs have increased since 1995, and future increases can be expected. In particular, costs in three areas--labor, interest on commercial debt, and payments to other railroads to access track and keep Amtrak's trains on time--have all contributed to these increases. Amtrak has attempted to control costs. However, while its performance has improved in recent years, from 1995 to 1999 Amtrak's operating costs were, in total, about $150 million (in nominal dollars) more than planned. Amtrak has no measures of labor productivity for its lines of business (e.g., intercity passenger service, commuter service) that could help it better manage its labor costs. Because future cost increases can be expected, it will be critical for Amtrak to achieve the revenue projections for such things as its high-speed rail program on the Northeast Corridor.
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